AAR CORP (AIR) Stock Fundamental Analysis
NYSE:AIR - New York Stock Exchange, Inc. - US0003611052 - Common Stock - Currency: USD
AIR gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 65 industry peers in the Aerospace & Defense industry. There are concerns on the financial health of AIR while its profitability can be described as average. AIR has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
AIR had positive earnings in the past year.
In the past year AIR had a positive cash flow from operations.
In the past 5 years AIR has always been profitable.
Of the past 5 years AIR 4 years had a positive operating cash flow.
1.2 Ratios
AIR has a Return On Assets (0.35%) which is in line with its industry peers.
With a Return On Equity value of 0.85%, AIR perfoms like the industry average, outperforming 42.19% of the companies in the same industry.
AIR has a Return On Invested Capital (3.43%) which is in line with its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for AIR is in line with the industry average of 7.69%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.35% | ||
| ROE | 0.85% | ||
| ROIC | 3.43% |
ROA(3y)3.83%
ROA(5y)2.8%
ROE(3y)6.5%
ROE(5y)4.72%
ROIC(3y)6.1%
ROIC(5y)5.14%
1.3 Margins
With a Profit Margin value of 0.39%, AIR perfoms like the industry average, outperforming 42.19% of the companies in the same industry.
In the last couple of years the Profit Margin of AIR has grown nicely.
AIR has a Operating Margin (3.98%) which is in line with its industry peers.
In the last couple of years the Operating Margin of AIR has grown nicely.
AIR has a Gross Margin of 18.80%. This is in the lower half of the industry: AIR underperforms 65.63% of its industry peers.
AIR's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 3.98% | ||
| PM (TTM) | 0.39% | ||
| GM | 18.8% |
OM growth 3Y2.59%
OM growth 5Y3.1%
PM growth 3Y-2.68%
PM growth 5Y41.67%
GM growth 3Y4.53%
GM growth 5Y3.5%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so AIR is destroying value.
AIR has more shares outstanding than it did 1 year ago.
The number of shares outstanding for AIR has been increased compared to 5 years ago.
AIR has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.75 indicates that AIR is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of AIR (2.75) is comparable to the rest of the industry.
The Debt to FCF ratio of AIR is 52.48, which is on the high side as it means it would take AIR, 52.48 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 52.48, AIR is in line with its industry, outperforming 43.75% of the companies in the same industry.
A Debt/Equity ratio of 0.84 indicates that AIR is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.84, AIR is doing worse than 70.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.84 | ||
| Debt/FCF | 52.48 | ||
| Altman-Z | 2.75 |
ROIC/WACC0.34
WACC9.98%
2.3 Liquidity
A Current Ratio of 2.68 indicates that AIR has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.68, AIR is in the better half of the industry, outperforming 64.06% of the companies in the same industry.
A Quick Ratio of 1.27 indicates that AIR should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.27, AIR perfoms like the industry average, outperforming 48.44% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.68 | ||
| Quick Ratio | 1.27 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 9.78% over the past year.
The Earnings Per Share has been growing slightly by 5.34% on average over the past years.
The Revenue has grown by 18.53% in the past year. This is quite good.
AIR shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.48% yearly.
EPS 1Y (TTM)9.78%
EPS 3Y35.99%
EPS 5Y5.34%
EPS Q2Q%11.11%
Revenue 1Y (TTM)18.53%
Revenue growth 3Y11.96%
Revenue growth 5Y2.48%
Sales Q2Q%25.8%
3.2 Future
Based on estimates for the next years, AIR will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.14% on average per year.
AIR is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.31% yearly.
EPS Next Y14.14%
EPS Next 2Y18.32%
EPS Next 3Y16.14%
EPS Next 5YN/A
Revenue Next Year18.56%
Revenue Next 2Y12.2%
Revenue Next 3Y8.98%
Revenue Next 5Y3.31%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
AIR is valuated rather expensively with a Price/Earnings ratio of 19.36.
Based on the Price/Earnings ratio, AIR is valued cheaper than 84.38% of the companies in the same industry.
AIR's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 28.47.
A Price/Forward Earnings ratio of 14.49 indicates a correct valuation of AIR.
Based on the Price/Forward Earnings ratio, AIR is valued cheaper than 95.31% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of AIR to the average of the S&P500 Index (92.74), we can say AIR is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.36 | ||
| Fwd PE | 14.49 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of AIR is on the same level as its industry peers.
The rest of the industry has a similar Price/Free Cash Flow ratio as AIR.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 128.68 | ||
| EV/EBITDA | 21.53 |
4.3 Compensation for Growth
AIR's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as AIR's earnings are expected to grow with 16.14% in the coming years.
PEG (NY)1.37
PEG (5Y)3.63
EPS Next 2Y18.32%
EPS Next 3Y16.14%
5. Dividend
5.1 Amount
AIR does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
AAR CORP
NYSE:AIR (2/4/2025, 8:25:56 PM)
After market: 67.37 0 (0%)67.37
+0.32 (+0.48%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryAerospace & Defense
Earnings (Last)
Earnings (Next)
Inst Owners97.36%
Inst Owner Change-1.4%
Ins Owners2.6%
Ins Owner Change-1.79%
Market Cap2.42B
Analysts82.22
Price Target82.11 (21.88%)
Short Float %2.39%
Short Ratio3.43
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0.05
Dividend Growth(5Y)-28.92%
DP0%
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.23%
Min EPS beat(2)2.63%
Max EPS beat(2)5.83%
EPS beat(4)4
Avg EPS beat(4)2.96%
Min EPS beat(4)0.67%
Max EPS beat(4)5.83%
EPS beat(8)8
Avg EPS beat(8)4.14%
EPS beat(12)12
Avg EPS beat(12)4.38%
EPS beat(16)14
Avg EPS beat(16)5.17%
Revenue beat(2)2
Avg Revenue beat(2)2.67%
Min Revenue beat(2)1.49%
Max Revenue beat(2)3.84%
Revenue beat(4)2
Avg Revenue beat(4)0.65%
Min Revenue beat(4)-1.39%
Max Revenue beat(4)3.84%
Revenue beat(8)5
Avg Revenue beat(8)1.93%
Revenue beat(12)8
Avg Revenue beat(12)1.69%
Revenue beat(16)10
Avg Revenue beat(16)1.23%
PT rev (1m)1.05%
PT rev (3m)1.05%
EPS NQ rev (1m)2.93%
EPS NQ rev (3m)-6.95%
EPS NY rev (1m)2.85%
EPS NY rev (3m)2.85%
Revenue NQ rev (1m)2.63%
Revenue NQ rev (3m)0.13%
Revenue NY rev (1m)2.06%
Revenue NY rev (3m)2.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.36 | ||
| Fwd PE | 14.49 | ||
| P/S | 0.94 | ||
| P/FCF | 128.68 | ||
| P/OCF | 50.09 | ||
| P/B | 2.05 | ||
| P/tB | 5.88 | ||
| EV/EBITDA | 21.53 |
EPS(TTM)3.48
EY5.17%
EPS(NY)4.65
Fwd EY6.9%
FCF(TTM)0.52
FCFY0.78%
OCF(TTM)1.35
OCFY2%
SpS71.61
BVpS32.9
TBVpS11.45
PEG (NY)1.37
PEG (5Y)3.63
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 0.35% | ||
| ROE | 0.85% | ||
| ROCE | 4.47% | ||
| ROIC | 3.43% | ||
| ROICexc | 3.53% | ||
| ROICexgc | 5.39% | ||
| OM | 3.98% | ||
| PM (TTM) | 0.39% | ||
| GM | 18.8% | ||
| FCFM | 0.73% |
ROA(3y)3.83%
ROA(5y)2.8%
ROE(3y)6.5%
ROE(5y)4.72%
ROIC(3y)6.1%
ROIC(5y)5.14%
ROICexc(3y)6.37%
ROICexc(5y)5.48%
ROICexgc(3y)7.98%
ROICexgc(5y)6.63%
ROCE(3y)7.94%
ROCE(5y)6.7%
ROICexcg growth 3Y2.94%
ROICexcg growth 5Y-1.6%
ROICexc growth 3Y-7.69%
ROICexc growth 5Y-7.54%
OM growth 3Y2.59%
OM growth 5Y3.1%
PM growth 3Y-2.68%
PM growth 5Y41.67%
GM growth 3Y4.53%
GM growth 5Y3.5%
F-Score4
Asset Turnover0.9
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.84 | ||
| Debt/FCF | 52.48 | ||
| Debt/EBITDA | 6.35 | ||
| Cap/Depr | 55.77% | ||
| Cap/Sales | 1.15% | ||
| Interest Coverage | 1.74 | ||
| Cash Conversion | 31.1% | ||
| Profit Quality | 188% | ||
| Current Ratio | 2.68 | ||
| Quick Ratio | 1.27 | ||
| Altman-Z | 2.75 |
F-Score4
WACC9.98%
ROIC/WACC0.34
Cap/Depr(3y)76.7%
Cap/Depr(5y)63.04%
Cap/Sales(3y)1.24%
Cap/Sales(5y)1.11%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)9.78%
EPS 3Y35.99%
EPS 5Y5.34%
EPS Q2Q%11.11%
EPS Next Y14.14%
EPS Next 2Y18.32%
EPS Next 3Y16.14%
EPS Next 5YN/A
Revenue 1Y (TTM)18.53%
Revenue growth 3Y11.96%
Revenue growth 5Y2.48%
Sales Q2Q%25.8%
Revenue Next Year18.56%
Revenue Next 2Y12.2%
Revenue Next 3Y8.98%
Revenue Next 5Y3.31%
EBIT growth 1Y-31.78%
EBIT growth 3Y14.86%
EBIT growth 5Y5.65%
EBIT Next Year62.57%
EBIT Next 3Y25.93%
EBIT Next 5YN/A
FCF growth 1Y354.05%
FCF growth 3Y-47.1%
FCF growth 5Y-22.59%
OCF growth 1Y189.22%
OCF growth 3Y-25.44%
OCF growth 5Y-8.34%